1. Field of the Invention
The present invention pertains generally to determining a contract price for a user-defined configuration of business services. More specifically, the present invention relates to comparing normalized configurations of business services to a corresponding normalized market standard and/or other business services.
2. Discussion of Related Art
Benchmarking is the process of comparing something against a defined standard in order to gain some knowledge about that thing, such as price, etc. In some cases, the price benchmarking process is somewhat analogous to the process of appraising the market price of a house. For example, house prices are typically estimated based on descriptive characteristics such as size (e.g., in units of square feet), location, number of bedrooms, market factors, and so forth. By obtaining many such characteristics, a fairly accurate representation of the house, or target property, may be determined. The target property is then compared to a set of similar properties that have recently sold to determine the market value. Because properties rarely have identical characteristics, adjustments must first be made to account for differences. At that point, a comparison can be made and fair market price assessed. Similarly, the fair market prices of service contracts are often determined by making comparisons to the closest “peers” after appropriate adjustments have been made to account for differences as best as possible.
In many cases, a client and business service provider jointly select and compensate a third party firm to conduct a benchmark for particular services. However, because service contracts often comprise many unique characteristics and the fact that there are different benchmarking methodologies available, the results are typically subjective and vary from benchmark to benchmark. Indeed each benchmarking firm uses a different approach, and even within a particular firm, when benchmarking is performed by consultants, the results vary even further because it is difficult to remove all bias from the individual.
Currently there exists a need in the art for a benchmarking process that can determine a market price for user-defined business services in a standard, objective, interactive, repeatable, and cost effective manner.